What You Need to Know Ahead of Bank of America's Earnings Release

North Carolina-based Bank of America Corporation (BAC) provides various financial products and services to individuals and businesses, commanding a market cap of $312.9 billion. The financial sector behemoth is expected to announce its fiscal Q2 earnings for 2024 before the market opens on Tuesday, July 16.

Ahead of the event, analysts expect Bank of America to report a profit of $0.79 per share, down 10.2% from $0.88 per share reported in the year-ago quarter. The company has consistently surpassed Wall Street’s EPS estimate over the past four quarters.

Despite its adjusted earnings for the last reported quarter declined 11.7% year over year to $0.83 per share, it beat the consensus estimates by 7.8%. Bank of America has experienced a decline in both net interest income and non-interest income, which led to a decrease in BofA’s revenues and profits.

Looking ahead to fiscal 2024, analysts expect Bank of America to report an EPS of $3.22, down 5.9% from $3.42 in fiscal 2023. However, its fiscal 2025 EPS is expected to grow 9.6% annually to $3.53.

However, BAC stock is up 39.5% over the past 52 weeks, substantially outperforming the S&P 500 Index’s ($SPX) 23% returns and S&P 500 Financials Sector SPDR’s (XLF) 22.2% returns over the same time frame.

Bank of America's strong performance stems from its stellar Q1 earnings results on April 16, as the financial powerhouse’s top line beat projections. Following the earnings, BAC stock initially dipped 3.5% but bounced back to close the next trading session with a 1.6% gain.

Despite declining revenues and profits, Bank of America’s investment banking revenue jumped 35% to $1.6 billion. Bank of America’s tech and innovation drive has fueled its digital banking dominance, deepening customer relationships and expanding its base. This quarter, BofA added 245,000 new checking accounts, marking 21 consecutive quarters of growth.

The consensus opinion on Bank of America stock is moderately bullish, with a “Moderate Buy” rating overall. Out of 24 analysts covering the stock, 10 advise a “Strong Buy” rating, two recommend a “Moderate Buy” rating, 11 suggest a “Hold” rating, and the remaining one has a “Strong Sell” rating.

Although Bank of America is currently trading above its average price target of $39.46, the Street-high target price of $46 suggests a potential upside of 15% from the current price levels.

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